After micro-loan boom, Uganda Mobile money firms target business lending

Rapid growth in consumer lending and a relatively light regulatory environment have encouraged mobile money operators to broaden their lending ambitions.

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Uganda’s mobile money operators are expanding beyond small consumer loans and targeting farmers, small businesses and other productive sectors; after registering strong growth in digital micro-lending. It is setting the stage for increased competition with commercial banks in the country’s credit market.

Rapid growth in consumer lending and a relatively light regulatory environment have encouraged mobile money operators to broaden their lending ambitions in a market where many low-income borrowers remain excluded from formal credit due to a lack of collateral. Typically, mobile money loans are less than Ush1 million ($237.9), carry repayment periods of fewer than 30 days, and attract interest rates of below 10 percent per month.